In the 'Careful What You Measure, You Just Might Get It' Department

Posted on November 17, 2008 by David

From the Wall Street Journal, a story about retailers using a combination of time/motion studies and software to squeeze efficiencies out of their staff. Stores Count Seconds to Trim Labor Costs:

Interviews with cashiers at 16 Meijer stores suggest that its system has spurred many to hurry up — and has dialed up stress levels along the way. Mr. Gunther, who is 22 years old, says he recently told a longtime customer that he couldn’t chat with her anymore during checkout because he was being timed. “I was told to get people in and out,” he says. Other cashiers say they avoid eye contact with shoppers and generally hurry along older or infirm customers who might take longer to unload carts and count money.

Efficiency has a lot of value but you have to be careful you aren’t undercutting your ability to deliver the same product or service at an equal or higher level of quality.

It reminds me a bit of Circuit City firing their highest-paid and most experienced sales people to cut costs and then watched their sales weaken just as they headed into our current economic mess. Genius!

Online Career Centers in the Current Economy: Huge Opportunity to Offer New Value

Posted on November 6, 2008 by David

The employment market is dramatically changing as the drumbeat of layoffs and a shrinking economy continue. The potential value of online career centers is, counter-intuitively, skyrocketing at the same time. Here is why:

Employers may have fewer positions available but the ones they do have open are likely to be extremely important;
Employers will have to sift through a much greater number of applicants for each position;
There is going to be an influx of new job seekers who are highly qualified without recent experience in job hunting.

Online career centers have greater value for both the employers and seekers in this market. Think about what additional value you can offer to each.

Can you help employers to more easily sift through a large number of applicants to find the hidden gems?

Can you help the newly unemployed to present themselves in the best light?

Can you offer special services to senior executives and the recruiters looking to cherry pick the best talent in this market?

You get the idea.

The career centers that offer the most value now will be the ones that surge forward with the most energy when the economy inevitably improves and organizations begin hiring in much greater numbers. What are you doing to be ready?

News without the Paper

Posted on October 29, 2008 by David

The Christian Science Monitor has announced that they are going web-only for daily news and will print a Sunday magazine: The Monitor Ends Daily Print Edition.

If you read the story, you’ll note they did this in order to cut costs while still retaining their foreign bureaus and reporters. This makes all sorts of sense to me. When I hear about newspapers slashing their reporting staff, I always shake my head. The asset that they leverage for revenue is news reporting. They need to find new ways to leverage that asset effectively rather than cutting it to the bone to preserve an old, declining, business model.

Peter Drucker wrote that the most innovative companies are those who are ruthless about killing off programs, products and services that are no longer producitve. Kudos to the CSM for going boldly to the forefront of their industry.

If you’ve never read it, CSM provides some of the best international coverage out there. I discovered it in college while pulling long graveyard shifts at the periodicals desk as a student employee of the library.

Time to Increase the Value You Offer

Posted on October 6, 2008 by David

If you’ve been peeking at the stock market this week or reading financial news, you are probably feeling more than a bit uneasy. There are definitely financial challenges out there and the economy may be undergoing a pretty significant amount of change now that it has been up ended.

But that is no reason to hide under our desks, as comforting as that might feel. Now is the time to raise the bar and increase the value you are offering to your customers, members and clients.

How well are you conveying the value of your products and services?

Can improving the usability of key pages on your site increase conversion rates and improve revenue?

Are you getting the most value possible from your existing technology and infrastructure?

Can you improve the efficiency of your processes to free up staff resources for other higher value actions?

Short term: Pick one thing you can do today to improve the value you offer. Do it again tomorrow. And the day after. (You get the idea.)

Medium term: What changes can you implement this quarter to make a significant difference?

Long term: Are new markets opening up for you due to the economy? Should you reduce or leave completely any existing markets that are unlikely to recover?

I guarantee you’ll feel better if you do something today. Go for it.

The Brutally Honest Mission

Posted on August 21, 2008 by David

James Gilmore, speaking on authenticity, said the following at ASAE earlier this week:

Associations today are a platform to maintain the current paradigm.

Another way of saying that: Associations are largely engines for preservation of the status quo.

I’ve seen plenty of evidence for this in my career. Despite often rather high minded and flowery missions, many groups act to preserve the interests of their members over all else. The operational behaviors of the organization reveal their true purpose.

This is not a bad thing, necessarily. However, if you are in the status quo business, why not dedicate yourself to it? Many organizations would be more effective if they were brutally honest about why they exist.

A brutally honest status quo mission would allow the organization to jettison activities that take up a lot of time and resources without any commitment to change. This would free up that energy for outcomes to which you are actually committed.

Then you can have very productive discussions, such as: what have we done to maintain the status quo today?

I am being a bit tongue in cheek with this post but I think the underlying lesson is there, related to Gilmore’s presentation. Can you “render authenticity,” accruing the benefits Gilmore says come of such an approach, if you are inauthentic about why you exist?

Trading Value for Money Leads to Profits. Amazing!

Posted on July 25, 2008 by David

Poking fun at the airlines is too easy these days but I think Southwest shows how you can actually make profits by giving value to your customers in exchange for money (crazy concept, I know!) in an otherwise troubled market.

According to the New York Times today, Southwest just posted a profit for their 69th straight quarter. A very big part of this has been do to their savvy fuel hedges limiting their exposure to the run up in oil. However, they have also revamped their pricing structure by not only raising fares, but offering a new class that gives advanced boarding, a free drink and an extra frequent flyer credit. The new class, Business Select, could generated about $100 million in new revenue.

Compare this to the other airlines who have not protected their fuel prices and are charging for previously ‘free’ services, such as baggage, without adding any additional value, terminally angering their customers.

Southwest, meanwhile, is advertising that ‘bags fly for free’ on their home page. I imagine that their executives must have to suppress giggles quite often as they dance around the rest of this sclerotic industry.

Are you offering value to your customers, visitors, clients or members? Taking captive markets for granted is risky in the long run: they have a habit of breaking out eventually.

Three Reasons Branded Online Communities Fail

Posted on July 21, 2008 by David

A Deloitte consultant just released result of a study of 100 businesses with online communities. From the WSJ:

One of the hot investments for businesses these days is online communities that help customers feel connected to a brand. But most of these efforts produce fancy Web sites that few people ever visit. The problem: Businesses are focusing on the value an online community can provide to themselves, not the community.

The three main reasons for failure were not surprising:

Focusing on the technology over the value of the community to its members;
Failure to assign experienced staff to develop the community;
Poor or no metrics for measuring success.

Let’s tackle those one at a time:

Bells & Whistles
It is so very tempting to focus on the gee whiz things you can do with technology, especially with the very hot social media arena. However, you have to center all of these efforts on the value you will provide to your anticipated community members, making sure that is aligned to deliver some value for your company or organization when it takes off. Constantly ask yourself “So what?” as you develop your plans. Once you have the value identified you can make rational choices about the technology you choose to deploy.

Leadership and Management
Would you launch a new product or service line without an experienced person to develop and manage it? Not usually, no. The same goes for online communities. They require care and feeding and interaction to do successfully. This requires dedicated staff who can interact with others online effectively and keep your online space focused on the value it should provide to participants and the company. It boggles the mind to read the story linked above and realize many of these companies spent over a $1 million on their site and then put half a staff person in place to run it.

Measuring Success
This goes back to value: your measures for success must tell you if you are creating the value you planned to achieve. Are your community members getting value? Is this participation generating value for the sponsoring company? Simply pages views and site registration won’t do. If you goal is to convert community members into customers, be sure you have processes and tools in place to measure that conversion rather than simply hope for the best.

(Story spotted via the most excellent CMSWatch.)

Chief Program Killer

Posted on June 19, 2008 by David

I had a conversation yesterday where one of Peter Drucker’s maxims on innovation was mentioned: sustained innovation can only happen in an organization if you are diligent about killing programs that do not provide sufficient value.

The reason for this is plain. It is impossible to make resources available for sustained innovation if all the resources of the organization are tied up in existing programs, products, services, etc.

Many organizations have put an executive in charge of fostering innovation but I imagine few of them consider putting the same person in charge of killing programs as well.

Selling Like It's 1989

Posted on May 28, 2008 by David

I was shopping online a few days ago for a nice fountain pen. When you want a fountain pen, you start with Mont Blanc. However, Mont Blanc publishes no prices online and they do not allow their retailers to do so either. The result? Many pages across the web featuring very nice Mont Blanc pens, each with a ‘contact for price’ button.

I bought a pen from Cross instead.

Price really wasn’t an issue here, it was convenience. I did not want to go through the hassle of having to interact with a human for what should have been a very simple, self-guided, impulse buy.

Controlling price information was a feasible strategy pre-Web. Keeping the numbers hush-hush prevents retailers from discounting competitions, protecting profit and the sales channel. This does not work when customers can easily price shop across the globe and expect to be able to make an informed purchase immediately.

I shudder to think of how many sales Mont Blanc forgoes with this dated tactic.

C. David Gammel, CAE

Helping associations pursue goals that matter.

Category Archives: Strategy